Corrupt Transactions Research Articles

A Comprehensive Review of Objective Corruption Proxies in Public Procurement: Risky Actors, Transactions, and Vehicles of Rent Extraction

This paper can provide a comprehensive review of quantitative corruption proxies, conceptualise how different indicators capture different aspects of corruption, and identify gaps in the measurement landscape. Institutionalised, well-established corruption in government contracting aims to bypass fair and open competition in order to allocate contracts to companies belonging to the corrupt group. This requires at least i) corrupt transactions allowing for rent generation, ii) particularistic relations underpinning collective action of corrupt groups; iii) organisations enabling rent allocation (public organisations); and iv) organisations extracting corrupt rents (private companies). These four requirements of corrupt contracting serve as a framework for the review. We find that there is a surprisingly wide array of indicators validated in particular contexts, leaving generalisability unclear. It is also suggested that the academic literature has largely been preoccupied with one or the other type of corruption proxies such as personal connections without recognising their complementarities. Given the clandestine and often complex character of corrupt deals, a comprehensive measurement approach is advocated where each indicator sheds light on different aspects of the same corrupt phenomena.

Military Corruption in China: The Role ofGuanxiin the Buying and Selling of Military Positions

AbstractHow doesguanxifacilitate corrupt transactions? Utilizing fieldwork data and published materials, this paper investigates howguanxipractices distort the formal military promotion system and facilitate the buying and selling of military positions in the People's Liberation Army (PLA). It identifies the three key functions ofguanxiin facilitating corrupt transactions: communication, exchange and neutralization.Guanxienables effective and safe communication among corrupt military officers, holds transaction partners to their word, and neutralizes their guilt about committing corrupt acts.

Does everyday corruption affect how Russians view their political leadership?

Do Russians’ personal experiences with corruption influence how they evaluate their political leaders and, if so, in what direction? In addressing this question, we focus specifically on small-scale corruption that arises when Russians encounter employees of service provision organizations. We analyze survey data gathered in the summer of 2015 from Russia to trace the links between personal corrupt behavior and political attitudes. We show that participation in everyday corruption lowers a person’s support for the political regime, both as a bivariate relationship and in a multivariate model with controls. Being involved in corrupt transactions reduces support for the regime through two indirect mechanisms: by making the political leadership’s performance seem worse and by heightening perceptions that corruption is widespread among the country’s leaders. We find no support for arguments in the literature that bribery and other forms of bureaucratic corruption help citizens pursue their needs in the face of inefficient state institutions and less developed economies. In Russia, those who frequently encounter corruption are less, not more, happy with the regime.

Empowering the Victims of Corruption: The Potential of Sleeping Third-Party Beneficiary Clauses

This paper proposes that third-party beneficiary clauses, rights ius quaesitum tertio, can be used to create platforms for private actor intervention in the fight against corruption that can help to shape an environment that discourages corruption in a self-regulatory manner. By linking those who bear the brunt of the negative consequences of corruption to public contracts tainted by corruption, third-party beneficiary clauses would give victims of corruption a seat at the table, a right to sue and a right to be engaged in the sanctioning processes with regard to such corrupt transactions. This approach can also act as a check on the actions of government officials and corporations by increasing the risk they incur through corrupt activity. However, there are good reasons for rules of standing; the machinery of justice may break down under the weight of a multiplicity of claims or, worse, an onslaught of frivolous claims. This paper therefore proposes that it is possible to provide third party redress, while also providing mechanisms to avoid encouraging excessive litigation, through establishing a sleeping third-party beneficiary clause in procurement contracts. Such clauses remain dormant unless the third party can demonstrate evidence of corrupt activity relating to the award of a specific contract. A threshold of evidence of corruption or fraud can be defined that will trigger the clause into operation, upon which it automatically comes into effect, making the identified third-party beneficiaries parties to the contract and giving them standing to sue on the contract. Ultimately, such a clause would be most successful if the specter of direct intervention discourages corruption so effectively that the clause is in fact never triggered into operation.

The dimensions of corruption and its impact on FDI decision making: the case of Guatemala

This study researches how the arbitrariness and pervasiveness of corruption affect the decision-making process and subsequent operations of firms investing in highly corrupt host locations. The results of the analysis demonstrate that firms headquartered in countries where corruption is high have an advantage when operating in a foreign country with a similar institutional environment. The reason for this advantage is that these firms possess knowledge of how to cope with the arbitrary and pervasive dimensions of corruption. Firms from countries with lower corruption levels than the host country, however, are more affected by corruption in a highly corrupt host country. Finally, though this study finds evidence that all firms operating in a highly corrupt country might participate in corrupt deals, those headquartered in highly corrupt countries are more likely to be willing to do so. This claim is based on 12 in-depth interviews with managers with FDI allocation responsibilities of firms operating in a highly corrupt host country. The results show that firms from less corrupt countries face stronger pressures from their headquarters to not engage in corrupt deals, whereas firms from more corrupt countries do not encounter such pressures.

Goffman’s Return to Las Vegas: Studying Corruption as Social Interaction

In this paper, we argue that corruption research can benefit from studying corrupt transactions as a particular form of social interaction. We showcase the usefulness of a theoretical focus on social interaction by investigating online user reports on the website Frontdesktip.com. Through this focus, we can observe users sharing experiences and tips on the best ways of bribing hotel clerks in Las Vegas for attaining room upgrades and other complimentary extras. We employ a logistic regression analysis to examine what factors influence the “successful” performance of this bribery practice. Our study makes a twofold contribution to existing research on corruption. First, on the theoretical level, we show that the typified and scripted character of social interactions can help explain the occurrence of corrupt transactions. Second, on a methodological level, our study showcases online self-reports as a useful data source to study corrupt transactions in an unobtrusive way.

The Role of Framing, Inequity and History in a Corruption Game: Some Experimental Evidence

We investigate the role of framing, inequity in initial endowments and history in shaping behavior in a corrupt transaction by extending the one-shot bribery game introduced by Cameron et al. (2009) to a repeated game setting. We find that the use of loaded language significantly reduces the incidence of bribery and increases the level of punishment. Punishment of bribery leads to reduced bribery in future. The evidence suggests that this game captures essential features of a corrupt transaction, over and above any sentiments of inequity aversion or negative reciprocity However, showing subjects the history of past play has little effect on the level of corruption.

An offer you can’t refuse: murdering journalists as an enforcement mechanism of corrupt deals

Anecdotal evidence suggests that journalists and bureaucrats in some countries are killed when they try to blow the whistle on corruption. We demonstrate in a simple game-theoretical model how murders can serve as an enforcer of corrupt deals under certain regime assumptions. Testing the main implications in an unbalanced panel of 179 countries observed through four periods, we find that corruption is strongly related to the incidence of murders of journalists in countries with almost full press freedom. While our results provide evidence that journalists are killed for corrupt reasons, they also suggest that some countries may have to go through quite violent periods when seeking to secure full freedom of the press.

السلطات المختصة بمكافحة ظاهرة الفساد في العراق

Iraq suffers today from a unique phenomenon Nkrrt society in all staff, and all his joints, but a phenomenon of rampant corruption in all aspects of life, and perhaps this output certainly of poor oversight and the application of legal rules and poor equipment of the executive and the politicization of the judiciary and the complacency of the legislature in drafting laws beneficial to the community and stay away from the public interest and attention to the personal and financial. Perhaps all these things pushed the country to the brink of collapse, especially with the presence of a handful intrusive live in kegs able to cover corrupt deals and Tzeysha protection and thus become defaulter and egg money and stole and manipulated the destiny of the people and the traitor at liberty Security punishment Voads much and this certainly make Iraq a backward country poor with it has the potential of enormous riches and make it in the ranks of the major powers, but the financial and administrative corruption and political push the country into the abyss. Perhaps this is what is pushing the researcher to addressing such topics with something of brevity, hoping that all roads are partially detailed in separate research.

Виктимологический аспект коррупционной сделки

Objective: to present the author's concept of the victimological aspect of corruption crime.Methods: dialectical method of cognition, mainly the systemic approach (analysis).Results: the article discusses the concept of corruption deal as an unlawful act, statutory offence (bribery and subornation), law abuse by the authorized entity. The illegal (most common), and manipulative types of corruption deals and their mechanisms are defined, as well as the ways of their implementation, which include mutually beneficial, bilateral trade, extortion and initiative, active bribery. The diverse negative effects of corruption on the legal relationships are proved. The danger of the crime deal is shown as the factor of corrupt behavior, and active means of formation of corruption networks, which increases victimogenity of corruption acts, doing harm not only to physical but also legal entities. In accordance with this, the point of view supported and proved that it is necessary to expand the notion of victim of corruption offences to legal persons. The conclusion is made about the feasibility of a legal assessment of corruption deals as a qualifying feature of a criminal offense.Scientific novelty: the article justifies the author's position in relation to an assessment of corruption victimization of the deal; victimological characteristic of a corrupt deals victim are given; critical analysis of basic victimological concepts is made to identify the potential corrupt deals victims and ensure victim safety.Practical significance: the idea is expressed of reorienting public consciousness, views on corruption as a way of solving problems; of changing tolerance to corruption, due to which the legal subjects become victims of corrupt deals; of amending the anti-corruption policies towards more careful attention to the protection of the legal relations subjects against the corruption threat.

Дискурс о противодействии коррупции в сетевой торговле

Objective: to determine the specific forms of corruption and promising methods to counteract corruption in network trade.Methods: the combination of inductive observations, comparisons, generalizations, facts and trends of corruption in network trade with a logical analytical deduction of economic theories and the corruption concept are the basis of the study and provide an opportunity, on the one hand, to assess the level of compliance of theoretical concepts of corruption with the practice and, on the other hand, to determine their applicability to organize opposition and create conditions to prevent its occurrence; to summarize the features of corruption in the form of a kickback, the discourse method was applied in this work.Results: on the basis of theoretical provisions and facts of corruption in trade, it is proved that it has typical characteristics of corruption in commercial and non-profit organizations. The key reasons are identified why corruption occurs in trade. Among them, supply of poor quality goods at inflated prices, leading to bribery in the form of «personal bonus» to administrator of the trading organization when selling goods by57Диалектика противодействия коррупцииThe dialectics of anti-corruptionАктуальные проблемы экономики и права. 2015. № 4Actual Problems of Economics and Law. 2015. No. 4an unscrupulous supplier, and also supply goods to the trade organizations, which will not buy without kickback. Most of these corrupt deals are carried out by natural monopolies in the form of state and municipal procurement. In some cases, the kickback is the argument, stimulating the decision to introduce new and advanced technologies. The factors that lead to corruption in trade are listed, and reasonable methods to counteract it are grounded, allowing to create conditions for its eradication in other branches of business as well.Scientific novelty: for the first time a generalization has been made about the deficit as the driving force in the mechanism, when the bribe- givers and bribe-takers change places.Practical significance: the main provisions and conclusions of the article can be used in the research of specific forms of corruption and in the developing methods of combating corruption both in trade and in other business areas.

INTERMEDIATED CORRUPTION

I model the role of intermediaries in corruption and examine the effects of policy on the level of intermediated corruption, price of permits, and welfare. Intermediaries with a history of being honest earn higher premiums. The frequency of corrupt transactions is inversely related to income levels. When the government increases the fraction of profits that it extracts from entrepreneurs, intermediation intensifies, as entrepreneurs are reluctant to obtain licenses through legal means. Therefore, when business costs are high, measures to combat corruption transfer value to intermediaries. Increasing the frequency of governments audits can increase the equilibrium price of permits.

Spurious Middlemen in Corrupt Transactions

Abstract The first step in solving the problem of corruption lies in diagnosing its root causes and determining the underlying factors. One of the most important facilitators of corrupt transactions is intermediaries who make corrupt dealings less risky, thereby increasing corruption. Even worse, there are spurious intermediaries who obtain bribes in connection with public services by pretending to have power over the issue. This deception may be carried out even if the officer providing the public service in question is honest. The simple game theoretical model formulated in this article tries to capture the mechanisms behind such deception. From the solutions of the model, certain policy recommendations to prevent such a process from occurring shall be provided.

Fair play? Not so much: Corruption in the Italian football

Not only football is one of the world's most popular sports, but it is also a multi-billion euro global business. Due to its large turnover, football may offer the stage for the commission of a wide variety of misconducts and corrupt activities. Progressively over the last decade, Italian football has severely suffered from a number of corruptive malpractices, in some cases also perpetrated with the aid of organised crime groups. A number of scandals have been put under the spotlight of public opinion, such as the ones of Calciopoli (“City of Football”) and of Calcio scommesse (“Football Bets”). In all, the search for profit seemed to have pushed the game into the background, and from the law enforcement investigations a widespread culture of illegality has emerged. Despite attracting a great deal of media attention and public demise, corrupt practices perpetrated within or through football organisations have seldom been analysed by scholars against the backdrop of relevant criminological perspectives. By drawing on documentary sources (judicial files and media news), this paper shall (1) categorise and describe different modalities and patterns of corrupt deals in the Italian football; (2) examine the findings through relevant criminological theories; and (3) identify systemic opportunities for corruption.

“A friend gave me a phone number” – Brokerage in low-level corruption

Corrupt exchanges are often brokered by a third party, but this phenomenon has not been satisfactorily explored by researchers of corruption. Literature on brokerage in general provides interesting models but they have not previously been applied to corrupt exchanges. Based on in-depth qualitative interviews with respondents who participated in actual corrupt transactions, this paper identifies several distinct brokerage types in low-level corruption in contemporary Hungary. The paper also provides explanation of variation in corruption brokerage in terms of actors' group affiliations, forms of the corrupt exchanges, brokerage mechanisms, as well as neutrality, benefit and motivation, risk distribution, and stability of the brokerage structure. Finally, we discuss some policy implications of corruption brokerage.

Corruption Propensity of Entrepreneurs in Asian Emerging Economies: A Theoretical Model

Corruption is one of the key challenges that impacts entrepreneurs in emerging economies in Asia. Entrepreneurs in these emerging economies in the early stages of their venture are particularly vulnerable to the pressures of engaging in corrupt transactions with government officials. In this paper, we focus on these entrepreneurs and build a theoretical model to explore some of the contextual factors that impact the propensity of entrepreneurs in Asian emerging economies to engage in corruption. We use perspectives from institutional theory, social networking theory and corporate governance to develop a theoretical model of how an entrepreneur’s institutional environment, the level of discretionary power of the state, the efficacy of the country's legal system, the presence of free and uncensored media in the economy, an entrepreneur’s social ties with government officials, and inclusion in business and professional networks shape his/her tendencies to engage in corruption.

The Dark Side of Business with Chinese Characteristics

Corruption has often been defined as the use of authority for private gain, with authority frequently assumed to be defined as official authority. Private actors, including corporate officers, can also exercise the authority granted them by a firm or other organization for improper private gain. Not only can private parties engage in corrupt transactions with public officials, they may also engage in corrupt transactions with other private parties, thus creating a form of “private corruption” that has been largely ignored, even though the presence of private-to-private corruption likely contributes to both private-to-public and public-to-public corruption. Evidence exists, in fact, of extensive inter-business in China and hence the presence of a corporate “culture of corruption.

Varieties of corruption control: introduction to special issue

For the past three decades the question of how corruption can be controlled transnationally has been moving up on the agendas of policy makers, NGOs and businesses. Whatever the forms, contextual meanings and short-term benefits from corrupt transactions, it has become the dominant perception that corruption destroys the legitimacy of political institutions including the rule of law, discredits private business, misallocates resources and human skills, enhances social and economic inequalities, just as it is believed to serve as an impediment to long term economic growth. This consensus has evolved alongside the proliferation of a transnational anticorruption industry [23, 49]. Similar to the politicization of other transnational public issues like environmental degradation and human rights abuse [48], the fight against corruption has come to have its own formal and informal institutions with commercial as well as non-commercial activities addressing various aspects of the problem at hand. The transnational anti-corruption industry thus rests on the activities and resources of a plethora of state and non-state actors, mobilizing people and professions, institutions and technologies, as well as money, for the conduct of corruption control. More than anything, it comprises legislative work in national and supranational fora, the creation of anti-corruption standards and guidelines to be deployed in organizations, as well as legal and forensic investigations of suspicious cases. It also involves consultancy in development aid such as advisory for organizations in search of knowledge and expertise about compliance programs, including whistle-blowing systems and other reporting mechanisms. The anti-corruption industry produces rankings and assessment tools that help to measure and compare the corruption risk of regions, industries, transactions and individuals, and it plays an important role in creating databases and surveillance technologies that can assist preventive work, including due diligence of agents in foreign markets and with respect to corporate mergers and acquisitions. And, not least, the anticorruption industry also spearheads capacity and training programs devoted to moral Crime Law Soc Change (2013) 60:115–126 DOI 10.1007/s10611-013-9460-z

Relational corruption in the PR China. Institutional foundations and its (Dys)-functionality for economic development and growth

The Chinese economy has undergone three decades of rapid economic growth, while at the same time experiencing a dramatic increase in the incidence and intensity of corruption. It is argued that these developments have been closely related and follow a fundamental logic of institutional arbitrage thriving in the context of a hybrid economy located somewhere between plan and market. Analysing various manifestations of corruption, it is shown that under certain background conditions corruption can be instrumental to economic development and drive a market-oriented transformation process. However, with the formal institutional framework crossing a threshold line of market coordination capacity, the potential of corruption to bridge institutional deficiencies in the formal system erodes and corrupt activities become increasingly ‘dys-functional’, impeding economic development and growth. In the course of the discussion Chinese guanxi networks are shown to provide a highly effective ordering mechanism for corrupt transactions, thereby facilitating the proliferation of corruption in China.

Petty corruption in Central and Eastern Europe: the client’s perspective

This qualitative study examines the role of clients in petty corruption by analyzing actual corrupt exchanges between ordinary citizens and low level public and private employees in post-communist Hungary. Using a grounded theory approach, interviews reveal how clients from different social strata deal with low-level agents in corrupt situations. Findings suggest two contrasting forms of low-level corruption: transactions where the client and the agent do not have a prior relationship and where external factors dominate the relationship; and cases with stronger social ties between the actors, where the client has more freedom to structure the transaction. However, a client's social background frequently determines the form of corrupt transaction and the form of resources illegally exchanged in the deal.